Jacob Little – The Original Wall Street Bear by Bob Kerstein

Jacob Little

The Original Wall Street Bear
by Bob Kerstein, CEO Scripophily.com

          Scripophily.com is a name you can TRUST!
Image of Jacob Little

Signature of Jacob Little on Certificate

Jacob Little was the first Great Bear of Wall Street. Bears on Wall Street had operated more in the United States than in Europe. Although there was a ban on short sales by the New York Legislature in 1812, the bear operator was a familiar figure in the nineteenth century. One who gained celebrity status was Jacob Little. He was a leading bear operator in the first half of the 19th century. His nick names included the “Great Bear,” the “Old Bear,” and the “Napoleon of Wall Street”. Little is also known for the Inventor of the Short Sale in the United States and the Inventor the convertible bond.

The Civil War wiped out his fortune and he died penniless.

From the book “FIFTY YEARS IN WALL STREET” by Henry Clews


MY advent in Wall Street was on the heels of the panic of 1857. That panic was known as the “Western blizzard.” It was entitled to the name, as its destructive power and chilling effects had surpassed all other financial gales that had swept over Wall Street. The first serious result of its fatal force was the failure of the Ohio Life and Trust Company, a concern of gigantic dimensions in those days.

The Company had an office in Wall Street, and on the announcement of the collapse, business became completely paralyzed. This failure was immediately followed by the suspension of many large firms that had withstood the shock of all ordinary collisions and had successfully weathered many financial storms.

The panic was due in part to excessive importations of foreign goods, and also to the rapid construction of railroads, to a large extent on borrowed capital. There were other contributing causes. The crops were bad that year, and the country was unable to pay for its imports in produce, and coin was brought to the exporting point. In October, the New York City banks suspended payments, and their example was followed throughout the country. Bank credits had been unduly expanded everywhere, and the time had naturally arrived for contraction. It came with a bound, and financial disaster spread like a whirlwind, becoming general.

The Stock Exchange had been a moderately growing concern for the ten years previous to this calamity, and the securities there dealt in had been rapidly accumulating in number and appreciating in value. Its members were wealthy and conservative, with a strong infusion of Knickerbocker blood, an admixture of the Southern element and a sprinkling of Englishmen and other foreigners.

The effect of the crisis on the majority of Stock Exchange properties was ruinous. Prices fell fifty per cent. in a few days, and a large proportion of the Board of Brokers were obliged to go into involuntary liquidation. There was a great shaking up all around.

Then came the work of rehabilitation and reorganization. Confidence gradually returned. The Young Republic had great recuperative powers, and they were thoroughly exerted in the work of resuming business. Much of the old conservative element had fallen in the general upheaval, to rise no more. This element was eliminated, and its place supplied by better material, and with young blood, and in December the banks resumed business.

This panic and its immediate results created an entire revolution in the methods of doing business in Wall Street. Prior to this time, the antique element had ruled in things financial, speculative and commercial. This crisis sounded the death knell of old fogyism in the “street.” A younger race of financiers arose and filled the places of the old conservative leaders. The change was a fine exemplification of the survival of the fittest, and proved that there was a law of natural selection in financial affairs that superseded old conservatism and sealed its doom.

Until that time, the general idea prevailed that those engaged in financial matters must be people well advanced in years, even to the verge of infirmity. It is the same idea that has been handed down, as if by divine right, from old world prejudices, especially in the learned professions. No doctor was considered a safe prescriber unless his hoary locks, bald head and wrinkled brow proclaimed that he had almost passed the period of exercising human sympathy. The same rule of judgment was applied to the lawyer and the clergyman. These unworthy prejudices were fostered by the character of the Government of the old country, and nurtured by the surroundings of the venerable monarchies of Europe, where they exist largely even to the present day. So tenacious of life are these old-fashioned ideas, that many of them were found in full vigor, dominating Wall Street affairs up to the crash of 1857, fostering the antique element and choking off salutary enterprise.

Hence the process of decay of these archaic notions and our gradual development. This struggle for new life in Wall Street was not successfully developed without a serious effort to attain it. The old potentates of the street fought hard to prolong their obstructive power, and their tenacious vitality was hard to smother, reminding one of the nine lives attributed to the feline species. The efforts of the young and enterprising men to gain an entrance to the Stock Exchange were regarded by the older members as an impertinent intrusion on the natural rights of the senior members. It was next to impossible for a young man, without powerful and wealthy patrons, to obtain membership in the New York Stock Exchange at the time of which I speak.

The old fellows were united together in a mutual admiration league, and fought the young men tooth and nail, contesting every inch of ground when a young man sought entrance to their sacred circle.

The idea then struck me that there was a chance for young men to come to the front in Wall Street. I was then engaged in the dry goods importing trade, in which I received my early training. I had been kept out of the Exchange for several years by the methods to which I have alluded. My fate was similar to that of many others. It was only by an enterprising effort, and by changing the base of my operations, that I finally succeeded.

The commissions charged at that time were an eighth of one per cent. for buying and selling, respectively. After numerous efforts to gain admission to the Exchange, without success, I finally made up my mind to force it. I at once inserted an advertisement in the newspapers, and proposed to buy and sell stocks at a sixteenth of one per cent each way. This was such a bombshell in the camp of these old fogies that they were almost paralyzed. What rendered it more distasteful to them still was the fact that, while they lost customers, I steadily gained them. The result was that they felt compelled to admit me to their ranks, so that I could be kept amenable to their rules and do business only in their own conventional fashion.

My membership cost me, in all, initiation fee and other trifling expenses in connection therewith, $500. This presents a striking contrast to the recent price of a seat, $35,000, but though this difference seems very large, yet the changes in every other respect connected with Wall Street affairs have been in similar proportion. Among some of the old members of that day were Jacob Little, John Ward, David Clarkson and others whose names may be found in the archives of the Stock Exchange. As an instance of the way in which membership was then appreciated, it may be mentioned that speculators frequently offered $100 a week, or ten times the cost of membership, for the privilege of listening at the keyhole during the calls.

Although the prostration growing out of this panic was very great and of long continuance throughout the country, general confidence being shaken to its very foundation, yet, on the whole, it was a great gain, and marked an era of financial and speculative progress. It was the chief cause in drawing out the young element in the business of Wall Street, which might have lain dormant for a much longer period without this sudden and somewhat rude awakening. It not only brought Young America to the front in speculation, commerce and general business, but it imparted an impetus of genuine enterprise to every department of trade and industry, from the good effects of which the country has never since receded.

This new element, emanating from the throes of one of the greatest business revolutions that any country has ever experienced, has continued to grow and thrive with marvellous rapidity. It is now getting so large that the Exchange will soon require a whole block instead of a basement as at its origin for its head-quarters. The Governing Committee of the Stock Exchange are now looking forward to arrangements for this consummation. How the ancient fathers of my early days in Wall Street would have been shocked at the bare idea of such amazing progress!

It is not the least singular phase of this evolution in Wall Street, that the youthful element to which I have referred stands alone as compared with the progress achieved by the same class of men in any other nation. In America only does the youthful element predominate in financial affairs; and results have justified the selection, which perhaps in no other nation is possible. Thanks to the freedom of our Republican institutions, which, in spite of some individual deductions and the occasional obstructions of “crankdom,” make way for that progress, in the wake of which the other nations of the world are emulous to follow.

The Exchange was at this time situated on William Street between Beaver Street and Exchange Place. That place is rich in speculative reminiscences. It was there that Jacob Little made and lost his nine fortunes. It was there that Anthony Morse, the lightning calculator, operated. He could foot up four columns of figures as easily as the ordinary accountant could run up one. He had been a clerk, and having saved seven hundred dollars by close economy, began to deal in stocks. His career at that time was more marvellous even than that of Keene of a recent date. Morse made a fortune of several millions in a year, and became bankrupt during the same period, without any available assets to speak of. It was all honorably lost, however. There was no Ferdinand Ward game connected with it.

Youthful speculators had not then learned the “crooked” methods of the young idea of modern times. It was there also that Daniel Drew began to accumulate those millions that afterward were subject to such a rude scattering. It was there that the celebrated “corners” in Rock Island, Prarie du Chien and Harlem were concocted. It was there that the wealth was accumulated which built twenty thousand miles of Western railroads, causing many millions of acres, that would otherwise have been a wilderness, to blossom like the rose, in spite of Mr. Powderly’s opinion that no material good can come out of speculation, and thus adding immense wealth in real estate to the country, besides conferring incalculable benefits on trade and commerce, and preparing comfortable homes not only for the pioneers and surplus population of the Eastern States, but a teeming soil that has attracted the downtrodden of every nation to come and partake of the blessings of freedom and prosperity.

One of Jacob Little’s speculative ventures has been rendered historically famous through the rule of limitation of sixty days for option contracts. The necessity for this limit was brought about by one of his celebrated attempts to manipulate the market. He was one of the most prominent speculators in Erie in the early days of Drew’s transactions with that property and its stocks. Mr. Little had been selling large blocks of Erie on seller’s option, to run from six to twelve months. This was in the early history of “corners,” before the method of managing them scientifically had been fully developed and while “blind pools” were yet in embryo.

The leading members of the Erie Board formed a pool to “corner” Mr. Little, and ran Erie shares up to a considerable height. They imagined that he was in blissful ignorance of their purpose, and had everything arranged for a coup d’etat which was to reach its crisis at two o’clock on a certain day, when Little was to be completely overwhelmed and hopelessly ruined. An hour prior to the time appointed by the clique for his disaster he walked into the Erie office, opened a bag filled with convertible bonds, and requested an exchange of stock for the same. He had purchased the bonds in London and had them safely locked up for the emergency, which he promptly met on its arrival. He got the stock, settled his contracts, broke the “corner,” and came out triumphantly. The option limit of sixty days was afterwards adopted in order to prevent similar triumphs in manipulation on the “short” side.

As will be illustrated more fully in subsequent chapters, Mr. Little’s convertible bond trick was used with signal advantage by his speculative successors in Erie, who practically demonstrated on several occasions that there were millions in it.

Mr. Little was generous and liberal to a fault with his brother speculators who had experienced misfortune. He used to say that he could paper his private office with notes he had forgiven to the members of the Board. He was also remarkable for his great memory. He could easily remember all the operations he made in the course of a day without making a note or a mistake.

Like Drew, he was careless in his attire, wearing a hat like that of a farmer, and not a very prosperous one, but he had no compeer in his day at calculating ahead in a speculative venture.

Sunshine and shadow in New York By Matthew Hale Smith – 1869


JACOB LITTLE originated the daring, dashing style of business in stocks, by which fortunes are made and lost in a day. He was born in Newburyport, Mass., and early exhibited great tact and aptitude for business. In 1817 he came to New York, and entered the store of Jacob Barker, who was at that time the most shrewd and talented merchant in the city. He remained with his master five years, and completed his financial education. In 1822 he opened an office in a small basement in Wall Street. Caution, self-reliance, integrity, and a far-sightedness beyond his years, marked his early career.

For twelve years he worked in his little den as few men work. His ambition was to hold the foremost place in Wall Street Eighteen hours a day he devoted to business — twelve hours to his office. His evenings he spent in visiting retail houses to purchase uncurrent money. He was prompt, energetic, reliable. He executed all orders committed to him with fidelity. He opened a correspondence with leading bankers in all the principal cities from New York to New Orleans.

Twelve years of industry, integrity, and energetic devotion to business placed Mr. Little at the head of fmancial operations in Wall Street. He identified himself with the style of business known as ” Bearing Stocks.” He was called the Great Bear on ‘change. His mode of business enabled him to roll up an almost untold fortune. He held on to his system till it hurled him down and beat him to pieces, as it had done many a strong man before.

For more than a quarter of a century Mr. Little’s office in the old Exchange building was the centre of daring, gigantic speculations. On ‘ change his tread was that of a king. He could sway and disturb the street when he pleased. He was rapid and prompt in his dealings, and his purchases were usually made with great judgment. He had unusual foresight, which at times seemed to amount to prescience. He controlled so large an amount of stock that he was called the Napoleon of the Board. When capitalists regarded railroads with distrust, he put himself at the head of the railroad movement. He comprehended the profit to be derived from their construction. In this way he rolled up an immense fortune, and was known everywhere as the Railway King.

He was the first-to discover when the business was overdone, and immediately changed his course. At this time the Erie was a favorite stock, and was selling at par. Mr. Little threw himself against the street. He contracted to sell a large amount of this stock, to be delivered at a future day. His rivals in Wall Street, anxious to floor him, formed a combination. They took all the contracts he offered, bought up all the new stock, and placed everything out of Mr. Little’s reach, making it, as they thought, impossible for him to carry out his contracts.

His ruin seemed inevitable, as his rivals had both his contract and the stock. If Mr. ” Little saw the way out of his trouble, he kept his own secrets; he asked no advice, solicited no accommodation. The morning dawned when the stock must be delivered, or the Great Bear of Wall Street break. He came down to his office that morning self-reliant and calm as usual. He said nothing about his business or his prospect. At one o’clock he entered the office of the Erie company. He presented certain certificates of indebtedness which had been issued by the corporation. By those certificates the company had covenanted to issue stock in exchange. That stock Mr. Little demanded. Nothing could be done but to comply. With that stock he met his contract, floored the conspirators, and triumphed.

Reverses so common to all who attempt the treacherous sea of speculation at length overtook Mr. Little. Walking from Wall Street with a friend one day they passed through Union Square, then the abode of our wealthiest people. Looking at the rows of elegant houses, Mr. Little remarked, ” I have lost money enough to-day to buy this whole square. . Yes,” he added, ” and half the people in it.” Three times he became bankrupt, and what was then regarded as a colossal fortune was in each instance swept away. In each failure he recovered, and paid his contracts in full. It was a common remark among the capitalists, that ” Jacob Little’s suspended papers were better than the checks of most men.”

His personal appearance was commanding. He was tall and slim; his eye expressive; his face indicated talent; the whole man inspired confidence. He was retiring jn his manner, and quite diffident except in business. He was generous as a creditor. If a man could not meet his contracts, and Mr. Little was satisfied that he was honest, he never pressed him. After his first suspension, though legally free, he paid every creditor in full, though it took nearly a million of dollars. He was a devout member of the Episcopal Church. Plis charities were large, unostentatious, and limited to no sect The Southern Rebellion swept away his remaining fortune, yet, without a murmur, he laid the loss on the altar of his country. He died in the bosom of his family. His last words were, * I am going up. Who will go with me ? ”

Is Your Disney War Bond Genuine?

By Fred Fuld III at AntiqueStocks.com
Author of the book: Let Me Entertain You with Antique Stock Certificates

Disney War Bond

During World War II, the Disney company issued “War Bonds” which, although they were not true bonds themselves, were given to investors who bought U.S. Treasury War Bonds. The certificates feature 22 different Disney characters making up the border of the certificate, including Mickey Mouse, Donald Duck, Goofy, and Pluto. The Disney certificates were given out by banks and war finance committees. These are available in the collectors’ market in both issued and unissued form.
There were only two authorized printers: the U.S. Government Printing Office and the Homer H. Boelter Printing Company. (Check the lower right corner for the name of the printer.) There were also two different types of war bonds, one in multi-color and one in black and white, where dot and line patterns were used in place of colors. The black and white variety is extremely rare.
If you collect Disney War Bonds, be careful of color photocopy fakes that are being sold. There are several ways to check if a war bond is genuine or not:
1. For the certificates printed by the Government Printing Office, if you hold the paper up to the light, you will see that the paper has a watermark depicting an eagle, about three inches high by three inches wide. All Disney War Bonds printed by the U. S. Government Printing Office have an eagle water mark. If it says it is printed by the Government Printing Office and it doesn’t have an eagle watermark, it is a fake. Certificate printed by the Boelter company do not have an eagle watermark but they do have the watermark of the paper company that manufactured the paper.
2. The certificate has a very light beige color. If it has a yellow background, it is a color photocopy. Even if the paper was left in the sun for a long time, it would not have a yellow background, it would have a darker beige background.
3. Look very closely at the background of Donald Duck’s eyes. They are made up of very tiny light blue dots (use a magnifying glass if necessary). If the eyes are a solid dark blue or solid purple, the certificate is a photocopy fake.

Houdini Picture Corporation By Fred Fuld III at AntiqueStocks.com

Houdini Picture Corporation

By Fred Fuld III at AntiqueStocks.com

Author of the book: Let Me Entertain You with Antique Stock Certificates


If you ask the average person on the street to name one magician, chances are that the most popular response is Houdini. Harry Houdini, who was born Erik Weisz, (his family later changed it to Ehrich Weiss), was from Budapest but moved to the United States when he was four years old, first to Wisconsin, then to New York City.

He eventually became one of the world’s most famous, if not the most famous, magician, escape artist, and illusionist, taking on the name Harry Houdini. However, what many people don’t know about Houdini is that he was also a motion picture producer, director, actor, screenwriter, and stuntman. His company was called the Houdini Picture Corporation. (See the image above.)

What is unusual about several of these certificates that have appeared in the collectors’ market is that Houdini’s signature is very light. This has led many to speculate that Houdini was using disappearing ink.

So what did this company actually do? It produced three silent black and white movies from 1921 to 1923:

The Soul of Bronze

The Man From Beyond

Haldane of the Secret Service

The Soul of Bronze was actually a movie from France that Houdini reformatted and distributed, but did not star in. The Man From Beyond is a movie about a man (played by Houdini) who comes back to life after being frozen for 100 years in the arctic. Haldane (also played by Houdini of course) is about a Secret Service agent who goes after counterfeiters and tries to rescue a woman.


Not many people are aware that although Houdini was the president of the company, his brother Theodore Hardeen actually ran it. One of the investors in the company was Harry Keller, a popular magician in the late 1800’s and early 1900’s.

Houdini even appeared in a few other movies that he did not produce, including The Grim Game and Terror Island, both distributed by Paramount Pictures.

Houdini’s signature appears on one other stock certificate, Martinka & Company, the oldest magic company in the United States. The Society of American Magicians held their meetings in the back of the shop. Houdini was the owner in 1919. He used his formal signature to sign the certificates.


Historical Notes

Originally Published and Printed by G.Labarre, The LaBarre Newsletter, Issue 1, Winter 1981

Historical Notes

Stock and bond certificates and shares are more than mere representations of wealth or financial gain. More than that, they are reflections of human endeavor, industrial expansion and the growth of this nation. Each has its own unique and fascinating story to tell. With those important points in mind, it is both interesting and useful for collectors and investors to be aware of historical background of companies that have issued stocks or bonds to finance their development and growth.  This first issue of the “Stock and Bond Investment Quarterly” will discuss a perennial favorite of many types of collectors; railroad companies.

  Taunton Branch Railroad Company, Massachusetts

This company was incorporated in April 1835, to construct a railroad from Taunton to Mansfield on the Boston and Providence line. Construction began that year, and was completed in August 1836.  On July 2, 1840, the New Bedford and Taunton Railroad was completed, and connected with the Taunton Branch.  Both railroads operated under the same management.

The original issue of capital stock amounted to $250,000 for the Taunton Branch. Actual construction costs overran that amount slightly at about $256,000. The line was short, running just over eleven miles. The railroad began paying dividends three years after completion, and within six years was paying a tidy six percent return on investment, a rate it was able to maintain for a number of years.

Attica & Allegheny Railroad Company, New York

The Attica & Allegheny Valley Railroad was succeeded by the Arcade & Attica Railroad.  

Unlike the Taunton Branch Railroad Company already discussed, this railroad seemed doomed from the outset.  Incorporated in November 1852, only about twenty-five miles of track were graded between Attica and Arcade during 1853 and 1854. In February 1856, the railroad was sold upon foreclosure of its mortgage.

  Fall River Railroad Company, Massachusetts

This particular railroad was formed by the consolidation of three separate lines: the Fall River Branch, the Middleboro, and the Randolph and Bridgewater Companies. The Fall River Branch was incorporated in March 1844, to construct a line from Fall River to Myrick’s Station. Both the Middleboro and the Randolph and Bridgewater Companies were formed in March 1845, the former to construct a railroad from Bridgewater to the Fall River Branch at Myrick’s Station, and the latter to build a line from Bridgewater to the Old Colony Railroad in Braintree.  The three merged in August 1845, following the successful completion of their respective segments of the entire line.  In April of the following year, the merger was granted official sanction by an act passed by the state legislature.

Share capital of the three companies totaled slightly over $1,000,000, a significant investment for that era.  Construction of the entire line to its junction with the Old Colony was completed in December 1846.  The entire line covered forty-two miles.  Nearly a decade later in 1854, the Fall River and Old Colony Lines were consolidated, thus forming the Old Colony and Fall River Railroad.

Old Colony and Fall River Railroad, Massachusetts

This merger was authorized on March 25, 1854.  The total length of road operated by the company totaled about ninety miles.

One individual, Richard Borden, played an important role in the development of the Fall River Railroad and also the subsequent merger with the Old Colony.  Born in 1795 in Fall River, Borden was one of the early industrialists of the area. Following the War of 1812, Borden became involved in shipbuilding, cotton milling, and ironworking, lucrative businesses, which expanded rapidly throughout the 1820’s and 1830’s. The Fall River Iron Works, in which he held a major interest, was created in 1821 with an initial capital investment of $18,000. By 1845, the business was worth almost one million dollars, and boasted an ironworks valued at half a million dollars.

Rapid, cheap transportation of materials and finished goods was naturally a source of considerable interest and concern to Borden. To that end, and mainly through his personal efforts and financial backing, the Fall River Railroad Company began construction in 1844, and was completed the following year.  With the creation of the Fall River and Old Colony Railroad in 1854, yet another venture which was due in large part to Borden’s backing, the Fall River area (and Borden) achieved an important goal – a direct rail line to Boston. Not surprisingly, Borden served on the new line’s board of directors for several years during the 1850’s.

Stockbridge and Pittsfield  Railroad, Massachusetts

Chartered in 1847, construction began in 1848, and the entire twenty-two miles of track running from Great Barrington to Pittsfield opened on January lst, 1850.  The Housatonic Company took a perpetual lease of the railroad in the same month in exchange for a seven percent rent based upon the total construction cost of about $450.000. The Housatonic Company operated the line successfully for a number of years, consistently meeting its annual rent charge without difficulty.